Americas

Americas

Oil prices drop on downbeat service data

07 January 2014 03:08 (UTC +04:00)

Baku-APA. Oil prices fell Monday as American service industries expanded at a slower pace in December, APA reports quoting Xinhua.

The Non-Manufacturing Index, which measures activity in the U.S. service sector, declined to 53 percent in December from 53.9 percent in November, the Institute for Supply Management said Monday.

The index showed that new orders, a signal of future business, decreased by 0.7 percentage point to 49.4 percent in December.

The service sector absorbs about 90 percent of the U.S. workforce. A weaker service data signaled less demand from the world's largest oil consumer.

The Fed will release the minutes of its December policy meeting Wednesday, at which the U.S. central bank announced the first tapering of its massive asset purchases by 10 billion U.S. dollars starting January.

The minutes will give investors a better understanding of the Fed's decision-making. Traders believed that the outlook for further tapering is the primary reason for oil prices' recent drop.

Oil prices also slipped as Libya increased its crude output. Spokesman of the Libyan National Oil Corporation said last week that the nation's largest oil field resumed production.

Light, sweet crude for February delivery lost 53 cents to settle at 93.43 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for February delivery decreased 16 cents to close at 106.73 dollars a barrel.